Mayor Bill de Blasio announced the agreement, which includes yearly salary increases retroactive to 2012, when the last contract expired.
The pay hikes are 1 percent for 2012 and 2013, 1.5 percent for 2014, 2.5 percent for 2015, and 3 percent for 2016.
As part of the agreement, all NYPD officers on patrol will be wearing body cameras by the end of 2019.
"This agreement is the result of many hours spent negotiating between the City and the PBA, once again demonstrating the power of collective bargaining," de Blasio said. "It doesn't matter how far apart the parties start; it matters where they end up. This agreement provides the compensation and benefits the world's finest police department deserves, while outfitting the entire force with body cameras and delivering the transparency and policing reforms at the center of effective and trusted law enforcement."
The PBA's lawsuit over body cameras will end upon contract ratification.
The union's 23,000 members have gone without a contract for five years and have entered binding arbitration over previous contracts.
"New York City police officers are no better than anyone else, but we are different," PBA President Pat Lynch said. "We perform the most difficult police job anywhere in the world, and the challenges and dangers we face each day continue to grow. The agreement that we announce here today recognizes those challenges and continues to move New York City police officers towards a package of compensation and benefits that is equal to our status as the finest police officers in the nation. It has been a long and arduous process, but we are grateful that Mayor de Blasio and his team sat down with us and negotiated in good faith to achieve this agreement."
With this settlement, the PBA joins other uniformed unions in reaching a deal on accidental disability. The city and the PBA have agreed to jointly support state legislation that would provide three-quarter of salary in the event of disability. The pension benefit is expected to be consistent with the other uniformed unions and includes a 1 percent employee contribution. Savings from the labor agreement were used to lower the required employee contributions.
The deal will now go to rank-and-file members for a vote.